20072007 ANNUALANNUAL REPORTREPORREPO T TO OUR SHAREHOLDERS We continued to demonstrate success in 2007 in executing our strategic plan. We took multiple steps to transform Live Nation into a vertically integrated live music company that directly unites artists, fans and sponsors across all revenue generating products. We are moving ahead to capitalize on our global concert platform as artists look for expanded and new business partners. Reaching an agreement in principle with U2 for a 12-year exclusive partnership is another signifi cant validation that Live Nation is the most attractive option for the biggest artists in the world. Madonna, and now U2, believe in Live Nation and our promising future as a highly innovative music company that is responding quickly to changes in the music business landscape. As a result, we believe Live Nation is a signifi cantly stronger organization, strategically and fi nancially, than only one year ago. Over the next year, we will continue to build on our three core strategies: • Grow our global concert platform internally • Prepare to launch our global ticketing, online business in 2009 • Continue to enter relationships with touring artists for longer and wider product lines centered around our core concert business When we launched Live Nation in December 2005, the company had been declining in overall profi tability for the previous few years. We set out to stop the decline and turn Live Nation into a growth company by running our core business better and by expanding into new revenue streams. In 2007, we set out to do four main things, all of which we achieved – to improve our North American Music operations, grow our International Music platform, launch the Live Nation Artist division and defi ne our Ticketing/ Online future. In 2007 we entered into a long-term agreement with CTS Eventim that will enable us to fully capitalize on our 20 million controlled tickets annually and launch our own global ticketing business in 2009. Operating our own ticketing platform will complete our vertical integration from artist to fan by removing the fi nal barrier between Live Nation and the millions of fans we serve. 2008 will be another exciting year in our transition. In today’s environment, the greatest achievement for any company is to build a solid track record of growth which opens the door to new business opportunities. We are one of the rare music companies that is growing organically. We are investing in both our Ticketing/Online and Live Nation Artists divisions, which we believe will provide solid revenue growth in the years to come. Two years ago when we launched Live Nation, we set forth to be the change that artists and fans were demanding and to leverage our global concert leadership into a more vertically integrated model that better serves fans and artists – 24 months later we have made bold moves, and we are creating real momentum that will help us accelerate our transition. We look forward to updating you on our progress as the year unfolds. Thank you for your interest in and support of Live Nation. Michael Rapino President and Chief Executive Offi cer April 21, 2008 www.livenation.com UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2007, OR ‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-32601 LIVE NATION, INC. (Exact name of registrant as specified in its charter) Delaware 20-3247759 (State of Incorporation) (I.R.S. Employer Identification No.) 9348 Civic Center Drive Beverly Hills, CA 90210 (Address of principal executive offices, including zip code) (310) 867-7000 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Name of Each Exchange on which Registered Common Stock, $.01 Par Value per Share; New York Stock Exchange Preferred Stock Purchase Rights Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. È Yes ‘ No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ‘ Yes È No Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. È Yes ‘ No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ‘ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer È Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company ‘ (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ‘ Yes È No On June 30, 2007, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate market value of the Common Stock beneficially held by non-affiliates of the registrant was approximately $1.2 billion. (For purposes hereof, directors, executive officers and 10% or greater shareholders have been deemed affiliates). On February 22, 2008, there were 74,938,143 outstanding shares of the registrant’s common stock, $0.01 par value per share. DOCUMENTS INCORPORATED BY REFERENCE Portions of our Definitive Proxy Statement for the 2008 Annual Meeting, expected to be filed within 120 days of our fiscal year end, are incorporated by reference into Part III. LIVE NATION, INC. INDEX TO FORM 10-K Page PART I ITEM 1. BUSINESS 1 ITEM 1A. RISK FACTORS 25 ITEM 1B. UNRESOLVED STAFF COMMENTS 43 ITEM 2. PROPERTIES 43 ITEM 3. LEGAL PROCEEDINGS 44 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 44 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES 45 ITEM 6. SELECTED FINANCIAL DATA 47 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 48 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 82 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 83 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE 129 ITEM 9A. CONTROLS AND PROCEDURES 129 ITEM 9B. OTHER INFORMATION 132 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 132 ITEM 11. EXECUTIVE COMPENSATION 132 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS 132 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 132 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 132 PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 133 PART I “Live Nation” (which may be referred to as the “Company”, “we”, “us” or “our”) means Live Nation, Inc. and its subsidiaries, or one of our segments or subsidiaries, as the context requires. Special Note About Forward-Looking Statements Certain statements contained in this Form 10-K (or otherwise made by us or on our behalf from time to time in other reports, filings with the Securities and Exchange Commission, news releases, conferences, internet postings or otherwise) that are not statements of historical fact constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act of 1934, as amended, notwithstanding that such statements are not specifically identified. Forward-looking statements include, but are not limited to, statements about our financial position, business strategy, competitive position, potential growth opportunities, potential operating performance improvements, the effects of competition, the effects of future legislation or regulations and plans and objectives of our management for future operations. We have based our forward-looking statements on our beliefs and assumptions based on information available to us at the time the statements are made. Use of the words “may,” “should,” “continue,” “plan,” “potential,” “anticipate,” “believe,” “estimate,” “expect,” “intend,” “outlook,” “could,” “target,” “project,” “seek,” “predict,” or variations of such words and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to, those set forth under Item 1A.—Risk Factors as well as other factors described herein or in our annual, quarterly and other reports we file with the Securities and Exchange Commission (collectively, “cautionary statements”). Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described in any forward-looking statements.